Contract
Exhibit
99.1
Securities
Purchase Agreement (the “Agreement”)
dated
as of October 31, 2005, by and among Telecomm Sales Network, Inc., a Delaware
corporation (the “Company”),
and
MV Nanotech Corp., a Texas corporation (the “Purchaser”).
W
I T N E S S E T H:
WHEREAS,
Purchaser desires to purchase from the Company and the Company desires to
sell
to the Purchaser (the “Purchase”),
(i)
3,230,000 restricted shares (the “Shares”)
of the
Company’s common stock, par value $0.0001 per share (the “Common
Stock”),
and
(ii) a four (4) year warrant to purchase 4,000,000 shares of Common Stock
(the
“Warrant
Shares”)
at an
exercise price of $2.50 per share (the “Warrant”),
in
the form annexed hereto as Exhibit
1;
and
NOW,
THEREFORE, for and in consideration of the mutual premises contained herein
and
for other good and valuable consideration, the receipt and sufficiency of
which
are hereby acknowledged, the parties hereto agree as follows:
1. Purchase
and Sale of the Securities.
Subject
to the terms and conditions of this Agreement, the Purchaser agrees to purchase
and acquire from the Company and the Company agrees to sell and issue to
the
Purchaser the Shares and the Warrant (collectively the “Securities”),
for
an aggregate purchase price of $80,750 (the “Purchase
Price”),
payable as follows: (i) $40,375 ( the “Initial
Payment”)
on the
Closing Date (as hereinafter defined), and (ii) the remaining $40,375, no
later
than December 31, 2005, as provided in the form of promissory note (the
“Note”)
annexed hereto as Exhibit
2.
2. Terms
of Purchase and Sale of the Securities.
Provided the conditions to closing set forth in Sections
7 and 8 hereof,
have been satisfied or waived, at the Closing (as hereinafter defined) (i)
the
Purchaser shall deliver to the Company (a) the Initial Payment by wire transfer
and (b) the executed Note, and (ii) the Company shall deliver to Purchaser
a
certificate or certificates representing the 3,230,000 Shares, and the
Warrant.
3. Closing.
The
closing of the Purchase (the "Closing")
shall
take place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, P.A., counsel to
the Company, at such time as all closing conditions set forth herein have
occurred (the "Closing
Date").
4. Representations
and Warranties of the Company.
In
order to induce the Purchaser to enter into this Agreement, the Company
represents and warrants to the Purchaser as of the Closing Date the
following:
(a) Organization.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power and
corporate authority to own its properties and to carry on its business
as
now
owned and operated by it, and is duly qualified to do business and is in
good
standing in each jurisdiction in which the ownership, use or leasing of its
properties, or the conduct or nature of its business make such qualification
necessary (except for such jurisdictions where the failure to so qualify
would
not have a material adverse effect on the Company). The copies of the Company’s
certificate of incorporation and bylaws, each as amended to date, which will
be
delivered to Purchaser prior to the Closing, will be true and complete copies
of
those documents as then in effect.
(b) Authority.
The
Company has all requisite corporate power and corporate authority to execute,
deliver and perform this Agreement and any other agreement or instrument
contemplated by this Agreement and to perform its covenants and agreements
hereunder and thereunder.
(c) Enforceability. The
execution, delivery, and performance of this Agreement by the Company have
been
duly authorized by all requisite corporate action. This Agreement has been
duly
executed and delivered by the Company, and, upon its execution by the Purchaser
shall constitute the legal, valid, and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that its
enforceability is limited by bankruptcy, insolvency, reorganization, or other
laws relating to or affecting the enforcement of creditors’ rights generally and
by general principles of equity. Upon delivery of the Securities at the Closing,
Purchaser will acquire good and marketable title to such
Securities.
(d) Subsidiaries.
The
Company has no direct or indirect Subsidiaries.
(e) No
Violations.
The
execution, delivery, and performance of this Agreement by the Company does
not,
and will not, violate or conflict with any provision of the Company’s
certificate of incorporation or bylaws and does not and will not, with or
without the passage of time or the giving of notice, result in the breach
of, or
constitute a default, cause the acceleration of performance, or require any
consent under (except such consents as have been obtained as of the date
hereof), or result in the creation of any lien, charge or encumbrance upon
any
property or assets of the Company pursuant to, any material instrument or
agreement to which the Company is a party or by which the Company or its
properties are bound, except such consents as have been obtained as of the
date
hereof.
(f) Capitalization. The
authorized capital stock of the Company consists of: 100,000,000 shares
of
Common Stock par value $0.0001 per share, of which 4,120,000 shares were
issued
and outstanding as of October 31, 2005, and 5,000,000
shares of blank check preferred stock, par value $0.0001 per share, of which
no
shares were designated, issued or outstanding as of October 31, 2005.
As
of
October 31, 2005, the Company had no outstanding options or warrants to purchase
shares of Common Stock.
(g) Issuance
of Securities.
The
issuance, sale and delivery of the Securities and the shares of Common Stock
issuable upon exercise of the Warrant (the “Warrant
2
Shares”)
have
been duly authorized by all requisite corporate action by the Company and,
upon
issuance in accordance with the terms of this Agreement against payment of
the
Purchase Price therefore, the Securities (and the Warrant Shares upon proper
exercise of the Warrant), will be duly and validly issued, fully paid, and
nonassessable with no personal liability attaching to the ownership thereof
and
free and clear of all liens imposed by or through the Company, and, assuming
the
accuracy of the representations and warranties of the Purchaser, will be
issued
in accordance with a valid exemption from the registration or qualification
provisions of the Securities Act of 1933, as amended (the “Securities
Act”),
and
any applicable state securities laws (the “State
Acts”).
(h) Exchange
Act Filing.
During
the twelve (12) calendar months immediately preceding the date of this
Agreement, all reports and statements required to be filed by the Company
with
the Securities and Exchange Commission (“SEC”)
under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
and
the rules and regulations thereunder, have been timely filed. Such filings,
together with all documents incorporated by reference therein, are referred
to
as “Exchange
Act Documents.”
Each
Exchange Act Document, as amended, conformed in all material respects to
the
requirements of the Exchange Act and the rules and regulations thereunder,
and
no Exchange Act Document, as amended, at the time each such document was
filed,
included any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(i) Certain
Fees.
No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank, or other person with respect to the transactions
contemplated by this Agreement.
(j) Registration
Rights.
Except
for shares already registered on Form SB-2, and the piggyback registration
rights granted pursuant to this Agreement, the Company has not granted any
registration and/or similar rights at any time or under any circumstances
to
register any of the Company’s capital stock, or any other securities of the
Company, for sale under the Federal securities laws.
(k) Prior
Sales of Securities.
Since
August 26, 2004, all sales of the Company’s securities by the Company were
either properly registered under the Securities Act and/or State Acts or
pursuant to an exemption therefrom and all such sales were all done in
accordance with all laws, rules and regulations and no person/entity has
any
rescission and/or similar rights with respect to any capital stock of the
Company.
(l) Undisclosed
Liabilities; Environmental.
The
Company has no liabilities or obligations which are material, individually
or in
the aggregate, which have not been disclosed in the Exchange Act Documents,
including any liabilities or obligations arising from or under any federal
state
or local environmental laws and regulations. The Company is not aware of
any
circumstances that may give rise to any such environmental liabilities or
obligations.
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(m) Investment
Company.
The
Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
(n) Disclosure.
The
Company understands and confirms that the Purchaser will rely on the foregoing
representations and covenants in effecting transactions in securities of
the
Company. All disclosure provided to the Purchaser regarding the Company,
its
business and the transactions contemplated hereby, furnished by or on behalf
of
the Company (including the Company’s representations and warranties set forth in
this Agreement) are true and correct and do not contain any untrue statement
of
a material fact or omit to state any material fact necessary in order to
make
the statements made therein, in light of the circumstances under which they
were
made, not misleading.
5. Representations
and Warranties of the Purchaser.
In
order to induce the Company to enter into this Agreement, the Purchaser
represents and warrants to the Company the following:
(a) Organization.
The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has full corporate power and corporate
authority to own its properties and to carry on its business as now owned
and
operated by it, and is duly qualified to do business and is in good standing
in
each jurisdiction in which the ownership, use or leasing of its properties,
or
the conduct or nature of its business make such qualification necessary (except
for such jurisdictions where the failure to so qualify would not have a material
adverse effect on the Company).
(b) Authority.
The
Purchaser has all requisite corporate power and corporate authority to execute,
deliver and perform this Agreement and any other agreement or instrument
contemplated by this Agreement and to perform its covenants and agreements
hereunder and thereunder.
(c) Enforceability.
This
Agreement has been duly executed and delivered by the Purchaser, and, upon
its
execution by the Company, shall constitute the legal, valid, and binding
obligation of the Purchaser, enforceable in accordance with its terms, except
to
the extent that its enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws relating to or affecting the
enforcement of creditors’ rights generally and by general principles of
equity.
(d) No
Violations.
The
execution, delivery, and performance of this Agreement by the Purchaser does
not
and will not, with or without the passage of time or the giving of notice,
result in the breach of, or constitute a default, cause the acceleration
of
performance, or require any consent under, or result in the creation of any
lien, charge or encumbrance upon any property or assets of the Purchaser
pursuant to, any material instrument or agreement to which the Purchaser
is a
party or by which the Purchaser or its properties may be bound or affected,
and,
do not or will not violate or conflict with any provision of the articles
of
incorporation or bylaws of the Purchaser.
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(e) Knowledge
of Investment and its Risks.
The
Purchaser has knowledge and experience in financial and business matters
as to
be capable of evaluating the merits and risks of Purchaser’s investment in the
Securities. The Purchaser understands that an investment in the Company
represents a high degree of risk and there is no assurance that the Company’s
business or operations will be successful. The Purchaser has considered
carefully the risks attendant to an investment in the Company, and that,
as a
consequence of such risks, the Purchaser could lose Purchaser’s entire
investment in the Company.
(f) Investment
Intent.
The
Securities are being acquired for investment for the Purchaser’s own account,
and not as a nominee, agent and/or part of a “group” as such term is defined in
Section 13 of the Exchange Act and not with a view to the resale or distribution
of all or any part of the Securities, and the Purchaser has no present intention
of selling, granting any participation in, or otherwise distributing any
of the
Securities within the meaning of the Securities Act. The Purchaser does not
have
any contracts, understandings, agreements, or arrangements, directly or
indirectly, with any person and/or entity to distribute, sell, transfer,
or
grant participations to such person and/or entity with respect to, any of
the
Securities. The Purchaser is not purchasing the Securities as a result of
any
advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement.
(g) Purchaser
Status. The
Purchaser is an “Accredited
Investor”
as that
term is defined by Rule 501 of Regulation D promulgated under the Securities
Act. The Purchaser is not registered as a broker-dealer under Section 15
of the
Exchange Act. Purchaser is a resident of the State of Texas.
(h) Disclosure.
The
Purchaser has relied solely upon the Company’s Exchange Act Documents in
connection with the decision to purchase the Securities. The Purchaser has
had
an opportunity to ask questions and receive answers from the Company regarding
the business, properties, prospects, and financial condition of the Company.
All
such questions have been answered to the full satisfaction of the Purchaser.
Neither such inquiries nor any other investigation conducted by or on behalf
of
the Purchaser or its representatives or counsel shall modify, amend, or affect
the Purchaser’s right to rely on the truth, accuracy, and completeness of the
disclosure materials and the Company’s representations and warranties contained
herein.
6. Conditions
to Closing
in
Favor of the Company.
The
obligation of the Company hereunder to issue and sell the Securities to the
Purchaser at the Closing is subject to the satisfaction, at or before the
Closing, of each of the following conditions, provided that these conditions
are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion by providing the Purchaser with prior written notice
thereof:
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(a) Purchase
Price.
The
Purchaser shall have paid the Purchase Price for the Securities being purchased
by the Purchaser at the Closing in the manner set forth in Section
2
hereof.
(b) Repurchase
Agreement.
Purchaser and the Company shall have executed and delivered to one another
the
Repurchase Agreement in the form of Exhibit
3
hereto.
(c) Form
8-K.
The
Company and Purchaser shall have agreed upon the form and substance of a
Form
8-K to be filed with the SEC to report the transactions contemplated by this
Agreement.
(d) Representations
and Warranties.
The
representations and warranties of the Purchaser shall be true and correct
in all
material respects as of the date when made and as of the Closing Date as
though
made at that time, and the Purchaser shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
the
Purchaser at or prior to the Closing.
(e) State
Securities Law.
Compliance with applicable state securities laws for sale of the Securities
to
Purchaser.
(f) Other
Matters.
All
certificates and documents and all proceedings related to this Agreement
shall
be in form and content reasonably satisfactory to the Company and its legal
counsel.
7. Conditions
To Closing In Favor Of The Purchaser.
The
obligation of the Purchaser hereunder to purchase the Securities is subject
to
the satisfaction, at or before the Closing, of each of the following conditions,
provided that these conditions are for the Purchaser’s sole benefit and may be
waived by the Purchaser at any time in its sole discretion by providing the
Company with prior written notice thereof:
(a) Certificates.
The
Company shall have issued certificates representing the Shares and the Warrant
to the Purchaser.
(b) Repurchase
Agreement.
Xxxxxxx
Xxxxxx and Xxxx Xxxxxxxxx shall have each (i) entered into a Repurchase
Agreement with the Company (the “Repurchase
Agreements”),
in
form and substance acceptable to the Purchaser pursuant to which the Company
shall repurchase 1,000,000 shares of Common Stock and 1,000,000 shares of
Common
Stock owned by Xx. Xxxxxx and Xx. Xxxxxxxxx, respectively (collectively the
“2,000,000
Repurchase Shares”),
and
(ii) delivered to the Escrow Agent (as defined in the Repurchase Agreements)
stock certificates representing the 2,000,000 Repurchase Shares of Common
Stock
with accompanying stock powers executed in blank.
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(c) Form
8-K.
The
Company and Purchaser shall have agreed upon the form and substance of a
Form
8-K to be filed with the SEC to report the transactions contemplated by this
Agreement.
(d) Representations
and Warranties.
The
representations and warranties of the Company shall be true and correct as
of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that reference a specific date
which
shall have been true and correct in all material respects as of such date),
and
the Company shall have performed, satisfied and complied in all respects
with
the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date, except where the failure of such representations and warranties to
be true
and correct as stated above and except for such nonperformance, failure to
satisfy or comply as would not, individually or in the aggregate, have a
material adverse effect on the Company’s business.
(e) Other
Matters.
All
certificates and documents and all proceedings related to this Agreement
shall
be in form and content reasonably satisfactory to the Purchaser and its legal
counsel, if any.
8. Stockholder
Approval.
The
Company represents and warrants to the Purchaser that the vote of the Company’s
Stockholders will not be required to approve the issuance of the
Securities.
9. No
Changes in Capital.
The
Company covenants and agrees that until the earlier of December 31, 2005
or the
closing of the transaction described in the Stock Repurchase Agreement attached
as Exhibit
3
hereto,
without the prior written consent of the Purchaser, the Company shall not,
directly and/or indirectly (i) issue,
sell or authorize for issuance or sale, any shares of any class of its
securities, including, but not limited to, its Common Stock, (ii) recapitalize
or reclassify its Common Stock, including, but not limited to, by way of
a stock
split or dividend, (iii) issue or sell any options, warrants, or other rights
to
purchase any of its securities or any securities convertible into Company
securities, or (iv) enter into any oral or written agreement or understanding
to
do any of the foregoing.
10. Piggyback
Registration.
If the
Company proposes to register any of its equity securities under the Securities
Act (other than a registration on Form S-8 relating solely to the sale of
securities to participants in a Company stock plan, the Company shall promptly
give Purchaser (and its transferees) at least 30 calendar days prior written
notice of such registration and include in such registration statement all
Shares and Warrant Shares owned by the Purchaser (and its transferees).
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11. Non-Public
Information.
Subsequent to the Closing, the Company covenants and agrees that neither
it nor
any other person acting on its behalf will provide Purchaser or their agents
or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto Purchaser shall have executed
a
written agreement regarding the confidentiality and use of such information.
The
Company understands and confirms that Purchaser shall be relying on the
foregoing representations in effecting transactions in securities of the
Company.
12. Further
Assurances.
The
parties hereto will, upon reasonable request, execute and deliver all such
further assignments, endorsements and other documents as may be necessary
in
order to perfect the purchase by the Purchaser of the Securities.
13. Entire
Agreement; No Oral Modification.
This
Agreement contains the entire agreement among the parties hereto with respect
to
the subject matter hereof and supersedes all prior agreements and understandings
with respect thereto and may not be amended or modified except in a writing
signed by both of the parties hereto.
14. Binding
Effect; Benefits; Assignment.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors and assigns; however, nothing in this
Agreement, expressed or implied, is intended to confer on any other person
other
than the parties hereto, or their respective heirs, successors or assigns,
any
rights, remedies, obligations or liabilities under or by reason of this
Agreement. Purchaser may assign this Agreement and any or all of its rights
and
obligations hereunder, in whole or in part.
15. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original and all of which together shall be deemed to be
one and
the same instrument.
16. Choice
of Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without regard to the conflicts of laws principles
thereof. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other party hereto of its
reasonable counsel fees and disbursements.
17. Headings.
The
section headings herein are included for convenience only and are not to
be
deemed a part of this Agreement.
[Signatures
on following page]
8
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
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TELECOMM
SALES NETWORK, INC.
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By:
/s/
Xxxxxxx X.
Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
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Title:
President
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MV
NANOTECH CORP.
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By:
/s/
Xxxxxx X.
Xxxxxx
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Name:
Xxxxxx X. Xxxxxx
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Title:
President
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